An independent policy paper by a top law firm commissioned by leading life insurer Pru Life UK calls for the government to review existing regulations on selling insurance policies to overseas Filipino workers while they are abroad to help them achieve financial security.
The paper, which looks into the current regulations on the cross-border selling of insurance products and offers recommendations on specific measures that would allow OFWs adequate access to different financial products and services while they are abroad, is in line with the company's commitment to driving up financial inclusion among Filipinos.
Authored by leading law firm Quisumbing Torres, an affiliate of Baker McKenzie, the paper entitled "Improving Access of Overseas Filipino Workers to Life Insurance" also discusses the need to revisit and update these regulations, given recent developments relating to migrant workers' programs and financial inclusion plans.
"Our ESG framework remains pragmatic and faithful to our purpose of helping people get the most out of life and further drive up financial inclusion in the country. The current working arrangements of OFWs make them particularly vulnerable to life's uncertainties. Our intentional goal is to help them prepare for a secure and stable future," Pru Life UK President and Chief Executive Officer Eng Teng Wong said.
The paper identifies key challenges surrounding access to life insurance that need to be addressed for the benefit of OFWs:
● Current regulations require OFWs to be physically in the Philippines to complete a purchase of life protection products from local-based companies. These options are not practical and may not fully cater to the needs of OFWs.
● Life insurance policies typically mature at the age of retirement, and OFWs retire in the Philippines after long periods of working overseas. It is ideal and practical for them to procure life insurance from a Philippine insurer, making it easier to claim payouts without dealing with a foreign entity.
● OFWs only have a limited time to acquire life insurance while in the country, which prevents them from availing of such products at an earlier age for lower premiums. Due to current regulatory restrictions, their sector remains at risk of being unserved and unprotected by insurance companies.
Given these findings, the paper cites these three recommendations:
● Ease up rules on cross-border selling of life insurance to OFWs by recognizing reverse solicitation exceptions. Allowing OFWs to purchase life insurance from local firms at the same time abroad would help cover the risks that would be more prevalent as they return to the country in their retirement years.
● Enter into bilateral and multilateral agreements for passporting exemptions in OFW-heavy countries. The Philippines may enter into bilateral and multilateral agreements that will enable local insurers to provide financial services to OFWs even abroad.
● Allow financial education, marketing, and selling of life insurance to OFWs and their families through technology. A recent study shows that OFWs only utilize financial services to remit money and have no bank accounts or personal insurance. Their knowledge of financial services being offered by local companies is also minimal. The Insurance Commission may consider allowing financial institutions to use their digital platforms to help OFWs understand the insurance products suitable for their needs.
The paper is part of Pru Life UK's mission to help Filipinos get the most out of life by making health and financial security accessible to the unserved and underserved, including OFWs.
The company is committed to continue engaging regulators to help ease the restrictions on cross-border selling of insurance, by strengthening its online presence and making life insurance affordable and easily accessible to OFWs to help them know about the different life protection and investment-linked products available to them.
Pru Like UK will continue to conduct financial literacy campaigns for OFWs and their families before they work abroad through caravans and informative materials to educate them on the importance of saving up for themselves and their households and having layers of insurance protection after working overseas.
The company has dedicated financial advisors from its OFW PRUTectors Club, providing OFWs with sound financial advice that will enable them to secure a better future.
It also offers OFW families free financial consultations, educating them on how to set their financial goals and find ways to achieve them, as well as manage their finances with help from Pru Life UK's over 33,000-strong, digitally-equipped financial advisors.
To download Pru Life UK's "Improving Access of Overseas Filipino Workers to Life Insurance" white paper, visit www.prulifeuk.com.ph.
